Co-sourcing becomes trend

By Nick Taylor

Basic outsourcing is being extended into other innovative applications, such as product lifecycle management. For example, aerospace and defense firms now outsource the detailed drawings and specifications needed to build their aircrafts.

Industry-specific outsourcing is also an important part of the future because it leverages the power of the one-to-many platforms mentioned earlier. Navitaire, for example, provides a comprehensive package of integrated, outsourced services to the airline industry, from reservations capabilities to resource planning and distribution to back-office functions and revenue accounting.

Some of the knowledge needed to achieve competitive advantage in the future will remain internal to a company _ distinctive intellectual property that drives new products and services. Other forms of knowledge will be sourced externally, opening up the walls of collaborative innovation to drive better ways of doing business.

Companies will likely increase their reliance on universities and private research labs, and on their suppliers. Outsourcing providers are already retooling themselves as providers of differentiated products and innovative processes. As these capabilities grow, co-sourcing with such providers to drive innovation will become increasingly important. We also foresee developments where companies take equity positions in organizations focused on emerging markets and new ideas.

The eight-year agreement, signed by Hanwha S&C and Accenture in April 2010, is an example of strategic co-sourcing. For eight years, Hanwha S&C and Accenture will co-provide IT solutions and services to domestic insurance companies, securities companies, banks, and Hanwha’s subsidiary financial firms.

In addition, Hanwha S&C and Accenture will co-operate the application process, co-provide the quality upgrade of IT services, and co-provide advanced processes to Hanwha’s subsidiary financial firms. Hanwha S&C will provide its domestic financial industry experience, as well as its local, custom application knowledge.

Accenture will provide its IT Transformational Outsourcing capabilities while bringing its software assets to co-solution future work.

Through this co-souring agreement, Hanwha S&C plans to achieve the stature of being one of top three domestic IT services firms.

Accenture plans to expand its domestic financial services business, and expand its outsourcing business.

The time is coming soon when even the very word outsourcing will be obsolete. No one in the industrialized world thinks of grocery shopping, for example, as outsourcing their family’s food production, though that of course is exactly what it is. We simply procure food from reliable sources at the quality and price we desire.

Nick Taylor is Accenture Korea Technology Growth Platform Lead